Buying your dream home involves a lot of planning and research. In a city like Mumbai, it is all the more important to do your research about neighbourhoods, real estate prices, connectivity and infrastructure. The city is the top real-estate hub in the country and picking a home here involves more than just visiting a set of properties and deciding what you like best.
Before you zero in on one of the homes in Mumbai, it is also important that you pick the right home loan provider in the city. You would want to compare housing finance providers and see what’s an appropriate fit for your budget and needs. Here are things you should keep in mind while looking for a home loan in Mumbai:
- Home loan eligibility amount
First things first, assess your budget and your financial situation. The next step is to check what is the loan amount you can avail. Typically, this amount is about 85 per cent of the value of your property. This can vary from lender to lender but it can go up to 90 per cent in some cases. The amount of loan you will receive also depends on your monthly income. Many home loan providers also make available tools such as EMI calculators and home loan eligibility calculators online so you can check the amount you are eligible for and also your EMI.
- Home loan interest rates
Another factor you would need to keep in mind while looking for homes in Mumbai and simultaneously home loan providers is to look at the interest rates provided. Different lenders offer different interest rates but it is important that you compare and look for the ideal and competitive rate. Home loan interest rates could be floating or fixed. Fixed rates mean that there are changes in rates on the basis of market fluctuations. Floating home loan interest rates mean that the interest rates vary depending on market forces; when rates drop your EMI may be lower and when rates increase, your EMI may go up. The EMI keeps varying during the tenure of your loan when you opt for a floating interest rate. It helps to assess your risk profile including your current financial situation, commitments and likely income in the future before you decide on a specific home loan interest rate.
- Repo rate transmission
Home loan interest rates are linked to the Reserve Bank of India’s (RBI) repo rate, which is the benchmark. If the repo rate is cut and a lender cuts the interest rates, then that would work in favour of the home loan borrower. Lenders respond differently to repo rate cuts; some may take longer to pass it onto the borrower and others may take shorter. Also, the amount of interest rate cuts may vary from lender to lender. You could compare lenders with this as one of the criteria.
- Prepayment and processing fees
Different home loan providers fix different processing fees and these are usually capped at 2 per cent of your total loan. This is a one-time payment made for processing your application. Prepayment or foreclosure of a home loan also attracts charges but the terms and conditions could vary.
- Documentation and turnaround period
You may have looked at many homes in Mumbai and finally picked the best and are in a hurry now to get the loan process kickstarted. Lenders would need some basic documentation like proof of identity, age and income. If you are looking at an online home loan, you may even be able to upload documents online and speed up the process. Many lenders offer quick turnaround times and minimal paperwork when it comes to sanctioning and disbursing your home loan. Choose the appropriate lender based on a convenient and seamless experience provided by them.
Now that you know what to keep in mind while choosing one of the home loan providers in Mumbai, you should also make sure you check your own credit score and profile because the greater your score is the higher the probability of your getting a loan. Your past repayment habits will have a bearing on your current loan so pay any outstanding bills you may have. Once you have chosen your dream home, quickly assess your finances, your commitments and your income. Set apart a certain amount for down payment. Visit lenders online or contact them to assess home loan eligibility. Keep all documents handy so the processing is smooth and your approval is quick.
The greater your research, the easier it is for you to zero in on the right home loan provider for your dream home in Mumbai, India’s real estate hub and financial capital.